In In re Pete, Ch. 13 Case No. 15-63725-JRS, 2015 WL 8540438 (Bankr. N.D. Ga. Dec. 8, 2015), the debtor husband and wife filed a joint Chapter 13 case, disclosing a combined total of unsecured debt of more than $475,000. The Chapter 13 Trustee objected to confirmation and filed a motion to dismiss, alleging that the debtors were ineligible for Chapter 13 because their unsecured debt was above the limit of section 109(e) ($383,175). The debtors countered that if each of their debt totals were considered independently, each would qualify for Chapter 13. The husband’s total individual and joint unsecured debts were about $285,000, and the wife’s total obligations were about $250,000 — both well below the limits of §109(e). Thus, the debtors argue that because they would be allowed to file separate cases, they should be eligible to file a joint case.
After acknowledging a split of authority among other Bankruptcy Courts, Judge Sacca concluded that the statute clearly states that the debt limits apply in all cases, whether it is an individual case or a joint case.
Eligibility for relief under chapter 13 is subject to certain limitations found in section 109(e), including certain limitations on the amount of debt owed. Section 109(e) provides in pertinent part:
Only an individual with regular income that owes, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts of less than $383,175 and noncontingent, liquidated, secured debts of less than $1,149,525, or an individual with regular income and such individual’s spouse … that owe, on the date of the filing of the petition, noncontingent, liquidated, unsecured debts that aggregate less than $383,175 and noncontingent, liquidated, secured debts of less than $1,149,525, may be a debtor under chapter 13 of this title.
11 U.S.C. § 109(e).
The language of section 109(e) is clear: a debtor who files an individual case and debtors who file a joint case are subject to the same unsecured debt limits. An “individual” can be a chapter 13 debtor if he owes unsecured debts less than $383,175. Id. An “individual … and such individual’s spouse” can be debtors if they owe, in the aggregate, unsecured debts less than that exact same amount. Id. Section 109(e) expressly treats the unsecured debts of joint debtors in the aggregate, “not as the separate debts of separate debtors separately subject to the debt limits.” [In re Miller, 493 B.R. 55, 58 (Bankr. N.D. Ill. 2013)]…
Congress made a choice in setting the same unsecured debt limit in section 109(e) for individual and joint filers to determine eligibility for a chapter 13 case. Although it can be debated as a matter of policy whether those debt limits should be increased or perhaps that joint debtors should have a higher limit, the choice made by Congress is certainly not absurd. In considering such debt limits, Congress determined that those who exceed these debt limits should have to seek bankruptcy relief in other ways or chapters, which might include chapters where greater creditor protections exist— such as a disclosure statement, voting on plan confirmation and the absolute priority rule found in chapter 11. Miller, 493 B.R. at 61, citing In re Brammer, 431 B.R. 522, 524
(Bankr. D.D.C. 2009). The fact that Congress only expressly required the aggregation of unsecured debts as opposed to secured debts with respect to joint debtors in section 109(e) leads this court to believe that Congress thought chapter 13 should not be used to reorganize and discharge unsecured debts in excess of $383,175 regardless of whether the case involves one debtor or two.